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Andrew B. Kennedy
Crawford SeminarMay 25, 2010
China’s New Energy Security Debate
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1. What is energy security?
2. China’s traditional view
3. New perspectives
4. Implications
Overview
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What is Energy Security?
Traditional western view
• IEA’s World Energy Outlook 2007:
“Energy security, broadly defined, means adequate, affordable, and reliable supplies of energy.”
• Typically focused on external dependence (oil imports)
• Frequently has a realpolitik flavor
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References to “Energy Security”in The People’s Daily
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China’s Traditional View
Similar to traditional western view
• Andrews-Speed et al. (2002), Downs (2004, 2006)
• The problem is growing external dependence
• Preoccupation with oil
• Realpolitik outlook
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China’s Import Dependence: Oil and Gas
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China’s Traditional View
Supply-side solutions
• “Stand on the domestic”
• Support national oil companies “going out”
• Long-term supply contracts
• Pipelines
• Strategic petroleum reserve
• Naval development and the “string of pearls”
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So what’s new?
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New Perspectives (1)
Analysts rethinking how to approach external dependence
• Criticism of oil companies
• Criticism of pipeline projects
• Criticism of naval ambitions
• Confidence in international markets and institutions
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Is the Chinese government convinced?
• Still wary of international markets
• Limits to engagement with IEA
• But there is concern about the oil companies
New Perspectives (1)
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There’s also a more basic challenge to the traditional view
• External dependence is not the problem
• Domestic dysfunction is the problem
– Runaway demand
– Unreliable power supply
– Environmental costs
New Perspectives (2)
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China’s Primary Energy Consumption
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China’s Energy Supply by Source
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Again, is the government convinced?
• Hu Jintao’s “new energy security concept”
• Domestic energy intensity targets
• Energy governance reforms
• An unfinished agenda
New Perspectives (2)
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Implications
China’s debate is changing – and this deserves support
• Encourage multilateral approach to external dependence
• Encourage focus on domestic problems
• How to do it?
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Implications
Encourage multilateral approach to external dependence
• The IEA needs China if it is to remain relevant
• OECD membership problem?
• China’s hesitation
• Prospects for change
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Implications
Encourage focus on domestic problems
• A difficult challenge
• Weak institutions
• External support for domestic reform
• And set a better example!
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Thank You
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Additional Slides
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China’s Traditional View
Maritime transport and strategic passageways for energy resources have already become lifelines for the development of the national economy and society. Particularly for oil and other key strategic supplies, our dependence on sea transport is very great, and ensuring the security of strategic seaways is extremely important. We must fully recognize the actual requirements of protecting our country’s developmental interests at sea, fully recognize the security threats our country faces at sea, and fully recognize the special status and utility of our navy in preparing for military conflict…
- Yao Wenhuai, Deputy Political Commissar, PLAN, 2007
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Compared with the problem of ensuring adequate supply,
the environmental challenges that come from energy consumption are
much more difficult to solve, and the domestic and international pressure
they generate is much greater, and they deserve greater attention.
- Zhao Hongtu, September 2007
Electric power security is the most important energy security problem.
- Zhu Chengzhang, May 2008
New Perspectives (2)
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Fossil Fuel CO2 Emissions (1980 - 2030)
0
0.5
1
1.5
2
2.5
3
3.5
4
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028
Sources: Oak Ridge National Laboratory; DOE Energy Information Administration.
Emis
sion
s (b
n m
etric
tons
car
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ChinaUS
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Primary Energy Consumption:China vs US